Byline Bancorp(BY) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Highlights Byline Bancorp reported strong Q1 2024 financial results, achieving $30.4 million net income, $0.70 diluted EPS, and surpassing key asset and equity milestones Financial and Operational Highlights Byline Bancorp achieved strong Q1 2024 financial and operational performance, marked by $30.4 million net income, $0.70 diluted EPS, and significant balance sheet growth Q1 2024 Key Financial Results | Metric | 1Q24 | 4Q23 | 1Q23 | | :--- | :--- | :--- | :--- | | Net Income | $30.4M | $29.6M | $23.9M | | Diluted EPS | $0.70 | $0.68 | $0.64 | | Total Revenue | $101.0M | $100.8M | $90.9M | | Pre-tax Pre-provision Net Income (PTPP) | $47.2M | $47.2M | $42.1M | Q1 2024 Key Balance Sheet Metrics | Metric | 1Q24 | 4Q23 | 1Q23 | | :--- | :--- | :--- | :--- | | Total Assets | $9.4B | $8.9B | $7.5B | | Total Loans and Leases | $6.8B | $6.7B | $5.5B | | Total Deposits | $7.4B | $7.2B | $5.8B | | Stockholders' Equity | $1.0B | $990.2M | $795.7M | Q1 2024 Key Ratios | Ratio | 1Q24 | 4Q23 | 1Q23 | | :--- | :--- | :--- | :--- | | Net Interest Margin (NIM) | 4.00% | 4.08% | 4.38% | | Efficiency Ratio | 51.94% | 51.63% | 52.10% | | Return on Average Assets (ROAA) | 1.36% | 1.34% | 1.32% | | Tangible Common Equity to Tangible Assets (TCE/TA) | 8.76% | 9.06% | 8.66% | Management Commentary Executive leadership expressed satisfaction with Q1 performance, highlighting robust financial results, strategic execution, and optimism for future franchise value enhancement - Executive Chairman and CEO Roberto R. Herencia emphasized the company's strong execution, noting that total assets surpassed $9.0 billion and stockholders' equity exceeded $1.0 billion[3] - President Alberto J. Paracchini described the start to 2024 as solid, with robust earnings and profitability, good growth in loans and deposits, stable credit quality, and well-managed expenses[3][30] Detailed Financial Performance This section provides a comprehensive analysis of Byline Bancorp's Q1 2024 operational performance and key income statement components Net Interest Income Net interest income for Q1 2024 was $85.5 million, decreasing 0.9% due to higher deposit interest expense, with NIM compressing by 8 basis points to 4.01% Net Interest Income and Margin | Metric | 1Q24 | 4Q23 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $85.5M | $86.3M | -0.9% | | Tax-equivalent NIM | 4.01% | 4.09% | -8 bps | | Average Cost of Total Deposits | 2.56% | 2.42% | +14 bps | - The decrease in net interest income was mainly due to a $2.7 million increase in deposit interest expense and a $773,000 increase in other borrowing interest expense[5] - Net loan accretion income contributed 20 basis points to the NIM, down from 24 basis points in the prior quarter[5] Provision for Credit Losses The provision for credit losses decreased to $6.6 million in Q1 2024, primarily due to a smaller allocation for individually assessed loans Provision for Credit Losses Comparison | Period | Provision for Credit Losses (USD) | | :--- | :--- | | 1Q24 | $6.6 million | | 4Q23 | $7.2 million | | 1Q23 | $9.8 million | - The Q1 2024 provision consisted of $6.9 million for loan and lease losses and a $248,000 recapture for unfunded commitments[10] Non-interest Income Non-interest income increased 6.7% to $15.5 million in Q1 2024, driven by derivatives, equipment sales, and favorable loan servicing asset valuation Non-interest Income Comparison | Period | Non-interest Income (USD) | | :--- | :--- | | 1Q24 | $15.5 million | | 4Q23 | $14.5 million | | 1Q23 | $15.1 million | - Key drivers for the quarterly increase included a $1.0 million rise in other non-interest income and a $531,000 decrease in the downward valuation of the loan servicing asset[31] - The company sold $72.5 million of U.S. government guaranteed loans during the quarter, compared to $89.1 million in Q4 2023[31] Non-interest Expense Non-interest expense marginally increased 0.4% to $53.8 million in Q1 2024, primarily due to higher salaries offset by reduced impairment charges Non-interest Expense and Efficiency Ratio | Metric | 1Q24 | 4Q23 | Change | | :--- | :--- | :--- | :--- | | Non-interest Expense | $53.8M | $53.6M | +0.4% | | Efficiency Ratio | 51.94% | 51.63% | +31 bps | - The increase was driven by a $2.0 million rise in salaries and benefits (due to annual payroll tax resets), offset by a $2.0 million decrease in impairment charges on assets held for sale[32] - The quarter included $1.1 million of charges related to branch consolidations[32] Income Taxes Income tax expense for Q1 2024 was $10.1 million, with an effective tax rate of 25.0%, a slight decrease from the prior quarter Income Tax Expense and Effective Rate | Metric | 1Q24 | 4Q23 | | :--- | :--- | :--- | | Income Tax Expense | $10.1M | $10.4M | | Effective Tax Rate | 25.0% | 25.9% | Balance Sheet Analysis This section provides a comprehensive analysis of Byline Bancorp's Q1 2024 balance sheet, detailing assets, liabilities, and equity components Assets and Credit Quality Total assets grew 6.0% to $9.4 billion driven by cash, while credit quality remained stable with net charge-offs decreasing to $6.2 million - Total assets increased by $528.5 million to $9.4 billion as of March 31, 2024, mainly from a $410.7 million increase in cash and cash equivalents[13] Credit Quality Metrics (Q1 2024 vs Q4 2023) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Net Charge-offs (annualized) | 0.37% | 0.73% | | Non-performing Assets | $68.7M | $65.3M | | NPA / Total Assets | 0.73% | 0.74% | | ACL / Total Loans | 1.51% | 1.52% | - The decrease in net charge-offs was primarily due to lower charge-offs in the commercial and industrial and commercial real estate loan portfolios[14] Deposits and Other Liabilities Total deposits grew by $173.2 million to $7.4 billion, driven by time deposits and commercial interest-bearing checking accounts, with borrowings increasing by $336.4 million - Total deposits increased to $7.4 billion, with time deposits growing by $137.7 million and interest-bearing demand deposits increasing by $109.5 million[15] - Total borrowings increased to $1.1 billion, primarily driven by a $200.0 million advance under the Bank Term Funding Program and increased Federal Home Loan Bank advances[15] Stockholders' Equity Total stockholders' equity increased by $18.9 million to surpass $1.0 billion, primarily due to retained earnings, with tangible book value per share rising to $18.29 - Total stockholders' equity grew to $1.0 billion at March 31, 2024, an increase of $18.9 million from the prior quarter-end, primarily due to increased retained earnings[16] Key Equity Metrics | Metric | 1Q24 (USD) | 4Q23 (USD) | 1Q23 (USD) | | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | $1.0B | $990.2M | $795.7M | | Tangible Book Value per Share | $18.29 | $17.98 | $16.92 | Shareholder Information This section provides key information for shareholders, including dividend declarations and details for the upcoming earnings conference call Dividend Declaration The Board of Directors declared a quarterly cash dividend of $0.09 per share, payable on May 21, 2024 - A cash dividend of $0.09 per share was declared on April 23, 2024[4] - The dividend is payable on May 21, 2024, to stockholders of record as of May 7, 2024[4] Conference Call and Webcast Byline Bancorp will host a conference call and webcast on Friday, April 26, 2024, at 9:00 a.m. Central Time, to discuss Q1 2024 results - The company will host a conference call and webcast on Friday, April 26, 2024, at 9:00 a.m. Central Time[36] Financial Tables and Reconciliations This section presents comprehensive financial tables, including consolidated statements, selected data, average balance sheets, portfolio compositions, credit quality, and non-GAAP reconciliations Consolidated Statements of Financial Condition This section presents detailed unaudited consolidated balance sheets for Byline Bancorp, Inc., providing a comprehensive breakdown of assets, liabilities, and stockholders' equity - Provides detailed line items for the company's balance sheet, including cash, securities, loans, deposits, borrowings, and equity components[20][39] Consolidated Statements of Operations This section contains detailed unaudited consolidated statements of operations, outlining components of revenue, expenses, and net income for comparative periods - Presents detailed line items for the company's income statement, including interest and dividend income, interest expense, provision for credit losses, non-interest income and expense, and earnings per share[21][40] Selected Financial Data and Ratios This table summarizes key per-share data, performance metrics, asset quality ratios, and capital ratios for comparative quarters, offering a quick reference for financial health - Summarizes key performance indicators such as earnings per share, book value, net interest margin, efficiency ratio, returns on assets and equity, and regulatory capital ratios[41] Average Balance Sheet and Net Interest Margin Analysis This section analyzes the company's average balance sheet, detailing interest-earning assets and interest-bearing liabilities, including yields, rates, and net interest margin calculation - Details the average balances, interest income/expense, and average yields/rates for various asset and liability categories, supporting the calculation of the 4.01% fully taxable equivalent net interest margin for Q1 2024[42][23] Loan and Deposit Portfolio Composition These tables detail the company's loan and lease portfolio composition by type and the breakdown of total deposits by account type, offering a granular balance sheet view - The loan portfolio of $6.8 billion as of March 31, 2024, was composed of 87.0% originated loans, 3.0% purchased credit deteriorated loans, and 10.0% acquired non-credit-deteriorated loans[43] - Total deposits of $7.4 billion were primarily composed of money market demand accounts (30.8%), non-interest-bearing demand deposits (25.2%), and time deposits (27.5%)[45] Credit Quality Tables This section provides detailed tables on the company's credit quality, including Allowance for Credit Losses (ACL) roll-forward and non-performing asset breakdown - The ACL for loans and leases increased from $101.7 million at the beginning of the period to $102.4 million at the end, after a $6.9 million provision and $6.2 million in net charge-offs[43] - Total non-performing assets stood at $68.7 million as of March 31, 2024, an increase of 5.2% from the prior quarter, primarily due to migration within the government guaranteed loan portfolio[25] Reconciliation of Non-GAAP Financial Measures This section provides detailed reconciliations of non-GAAP financial measures, including adjusted net income, tangible book value, and adjusted efficiency ratio, to their most directly comparable GAAP counterparts - Reconciles reported Q1 2024 net income of $30.4 million to adjusted net income of $30.6 million after accounting for impairment charges[52] - Provides the calculation of tangible common equity ($806.9 million) and tangible assets ($9.2 billion) by excluding goodwill and other intangibles from the respective GAAP measures[53] - Details the calculation of key non-GAAP performance ratios, including the adjusted efficiency ratio (51.75%) and the return on average tangible common stockholders' equity (15.88%)[54]